103k views
5 votes
Sandhill Co. sells office equipment on July 31, 2022, for $22,430 cash. The office equipment originally cost $77,870 and as of January 1, 2022, had accumulated depreciation of $36,830. Depreciation for the first 7 months of 2022 is $4,580. Prepare the journal entries to (a) update depreciation to July 31, 2022, and (b) record the sale of the equipment

1 Answer

5 votes

Answer:

(a)

July 31, 2022

Dr. Depreciation Expense $4,580

Cr. Accumulated Depreciation $4,580

(b)

Dr. Cash $22,430

Dr. Accumulated Depreciation $41,410

Dr. Loss on Sale of asset $14,030

Cr. Cost $77,870

Step-by-step explanation:

Before sale of the asset, depreciation for the year should be recorded. To incorporate its effect on the sale.The depreciation for the 7 months of 2022 will be added to the accumulated depreciation account.

July 31, 2022

Accumulated Depreciation = $36,830 + $4,580 = $41,410

Net Loss is calculated by deducting the accumulated depreciation and cash received on the sale from the original cost of the asset.

User Ilya Saunkin
by
8.6k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.